Vesta Digital Blog

Why You Shouldn’t Use Free Promotions

Posted on: November 16, 2010

free promotionsIf you are a small business owner dabbling with your advertising and marketing strategy, you may be tempted to offer free products as promotions. While this can be a great idea to achieve short-term results, it can actually hurt your business in the long run.

Free can be dangerous

Offering something for free can train consumers to think that your offer does not have much value. In time, consumers might actually come to expect things for free. For example, remember the days when we were all happy to get a free standard cell phone after signing that dreaded two-year contract? These days, we have come to expect a free cell phone with every new contract.

Online businesses are starting to offer free shipping, which can cut seriously into their profits. Hotels offer free Internet service, etc. These things are going to become extremely difficult to charge consumers for because they have come to expect these commodities as “free.” These perks aren’t even free anyway, we pay for these commodities via other buried charges.

Free can be copied

If you are offering some sort of accessory, or supplementary product for free, your competitors are fully capable of offering it too—especially if you are successful. If you are gaining a lot of traffic and attention through your free promotions, your competitors won’t be far behind. What you think starts out as a transient tactical marketing strategy can actually bury you in the industry.

You don’t want to get caught in an industry albatross where you keep cutting prices to undermine your competitor and both of you end up losing an intense amount of money.

Offering products for free every once in a while (everything is okay in moderation), is fine. Whether it’s a free consultation or a free sample, it can be at your advantage to offer something for free as a kind gesture even.

However, offering anything for free requires a significant amount of discretion.

As Steve McKee from Bloomberg Businessweek said in his post:

“It’s when you offer something for nothing as an enticement to buy that the danger sets in. If you try to fool your prospects by making your pitch about what’s “free,” you’ll also be fooling yourself.”

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